A landlord is at the centre of a bitter dispute with pub bosses about offering free beer to punters.

Neil Cox claimed he could not afford the prices that drinks chain Punch Taverns demanded for booze as part of his tenant's contract and instead bought it cheaper elsewhere.

Since the end of January, he has been handing over pints and halves as "gifts" when his punters bought bottles of pop, chew sticks and lollipops from behind the bar, believing he had found a legal loophole in his agreement.

However Punch have now served an injunction against Mr Cox and his partner Yvonne Bates claiming they are in breach of their 17-year lease which, they say, stipulates they must buy their alcohol from them.

forced

Mr Cox, who runs The Original Masons in Walbottle, Newcastle, claimed: "I'm being forced into doing this as we can't afford their exorbitant prices.

"Punch charge #203.71 plus VAT for 22 gallons of Carling Lager, for example, which they purchase for only #65 . . . that's a 188 per cent mark up.

"Under these prices we can't afford to take a salary - even though we are working 90 hours a week - as we have to find the money to pay the #72,000 rent as well as pay staff and cover all our overheads. We had been living on our savings.

"We can buy our beer from another supplier for #120 which I feel is the price we should be getting it from Punch. It was then I came up with the idea to gift it instead of selling it, which I believe wouldn't be in breach of the contract."

Punch Taverns, which owns 10,000 pubs in the UK, took over as landlord in October last year, just three months after Mr Cox signed a lease with original owners Avebury Taverns.

Mr Cox, 50, said: "They keep telling us it is sour grapes and that it is no fault of Punch Taverns that we are in this position, but how can they claim that when they make us pay such high prices for specified drinks, some of which are 70pc more than the man in the street would have to pay if he went to the warehouse.

"We've asked if it would be possible to have a rent reduction or a reduction in the price of specified drinks so we could have a fighting chance to survive rather than go into bankruptcy, but they've categorically stated this would never happen."

Ms Bates, 47, said: "It has been an enormous stress but we are going to lose everything if we do not keep fighting. I believe this is an injustice and we will not give up."

A Punch Taverns spokesman said: "It is with regret that we have applied to the courts for an injunction against The Original Masons retailers, Mr Cox and Ms Bates. The hearing date has been set for 24 March.

"Despite offers to help with their business, Mr Cox and Ms Bates have chosen a course which is clearly in breach of the terms of their lease which states they must purchase their beer from Punch.

"In addition to the breach, the promotion is in our opinion completely irresponsible and does nothing to support the responsible retailing ethics central to our company and the standards we expect from our business partners."

The spokesman would not say how much their booze charges to the pub were.

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Drink loophole spelled out to punters

To all our customers: We have been forced into a situation whereby in order to make a reasonable living we will not be able to sell beer, cider or alcopops.

However we realise that this would be a great inconvenience to you, so we have decided to make these items available to you at no charge when you purchase a bottle of pop. We have also extended this offer to include half pints. You qualify for this when you purchase a lollipop or a chew stick. The cost of a lollipop is #1.15 and a chew stick is #1.20.

A bottle of Black Pop at #2.40 means a free pint of Guinness, Stella, Woodpecker, Strongbow and Sirrus. Or buy a chew stick for #1.20 to qualify for a free half.